Macquarie-led group buys British power station

A consortium of investors led by
Macquarie Group
’s infrastructure and real assets unit has agreed to acquire DONG Energy’s Severn gas-powered energy station in South Wales for £350 million ($629 million).

The agreement includes an earn out based on future gross margin of the power station, DONG Energy said in a statement. The divestment will result in a before-tax loss for DONG, it said.

The Severn power station has a capacity of 832 megawatts and is able to generate power for about 1.5 million British households. It began commercial operations in November 2010.

Macquarie’s infrastructure funds have made a spate of investments in the UK in recent years, including leading a group that bought Thames Water from its German owners RWE in an £8 billion deal in 2006.

“We have succeeded in divesting the Severn power station at a satisfactory price in a difficult market," DONG Energy’s executive vice-president, Thomas Dalsgaard, said in the statement.

Macquarie’s latest results, for the six months ended September 30, showed the assets under management in the funds unit increased 13 per cent.